MI Deduction Still in Play?

Tax writers did not include a mortgage insurance deduction in a $70 billion tax cut bill that Congress is expected to pass this week, but the MI deduction is still in play, sources have told MortgageWire.Republican leaders want to pass a second tax bill this year and it is expected to include the MI provision, sponsored by Sen. Gordon Smith, R-Ore. The MI provision would allow homebuyers with less than $100,000 in income to take a full tax deduction for mortgage insurance premiums. If passed, the deduction would be available for only one year. But Congress could extend it next year. Extensions of several tax deductions and credits are part of the second tax bill that is being negotiated. Sen. Smith has pushed for an MI deduction for several years, only it see it dropped from tax legislation just before final passage. Supporters are hoping this year will be different.

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